Summary
Sprinklr reported total revenue of $200.7 million for the fiscal 2025 third quarter, up 7.7% from $186.3 million in the prior-year quarter. Revenue for the nine months ended October 31, 2024 was $593.9 million, up 10.4% from the same period a year earlier. Management credits existing customers buying more seats and add-on modules, partly offset by some customers trimming purchases amid macroeconomic pressure. Subscription revenue made up the bulk of the total, with professional services contributing the rest. The company sells its unified customer experience platform to more than 1,800 enterprises, including more than 60% of the Fortune 100, and operates in over 80 countries.
Profitability moved in the opposite direction. Gross profit for the quarter was $142.9 million, up 2.1%, but gross margin fell to 71.2%, down 3.9 percentage points from a year earlier. Higher third-party cloud and data costs drove the compression, with data and hosting costs up $4.6 million. Operating income was $7.9 million, down 40.2%, and operating margin fell to 3.9%, down 3.1 percentage points. Net income was $10.5 million, down 38.4%, and diluted EPS was $0.04, down from the prior-year quarter. Non-GAAP operating income was $23.3 million against $27.4 million a year ago, and non-GAAP diluted EPS was $0.10 versus $0.11. Research and development expense was roughly flat, while sales and marketing expense rose 3%.
Cash generation was uneven. Operating cash flow for the quarter was $9.2 million, down 56.3% from a year earlier, while the nine-month figure of $72.2 million was up 33.3%. Free cash flow, which the company defines as operating cash flow less purchases of property and equipment and capitalized internal-use software, was $4.9 million for the quarter and $57.6 million year to date. Capital expenditures were $1.0 million, down 53.3%. Cash, cash equivalents and marketable securities totaled $476.6 million as of October 31, 2024, split between $93.2 million of cash and cash equivalents and $383.4 million of marketable securities. The company notes it typically sees higher billings in the fourth quarter and higher collections in the first half of the year.
Backlog metrics held up better than revenue. Remaining performance obligations were $906.3 million, up 17.0% year over year, and current RPO was $545.6 million, up 11%. Deferred revenue, current portion, was $311.0 million, up 4.7%. The company counted 147 customers spending more than $1 million in trailing twelve-month subscription revenue, up 20% from 123 a year earlier. Net dollar expansion rate, though, slipped to 107.3% from 117.7%, which management links to elevated churn and the macroeconomic environment.
Guidance for the fourth fiscal quarter ending January 31, 2025 calls for non-GAAP operating income of $17.5 million to $18.5 million and non-GAAP net income per share of about $0.07 on roughly 265 million diluted shares. For the full fiscal year ending January 31, 2025, the company projects non-GAAP operating income of $76.4 million to $77.4 million and non-GAAP net income per share of $0.31 to $0.32. The company does not reconcile these non-GAAP outlook figures to GAAP because of the variability of stock-based compensation.
Several items deserve attention. General and administrative expense rose 21%, driven by $4.7 million of consulting costs tied to strategic projects and $3.3 million of higher personnel costs. The nine-month provision for credit losses climbed $9.0 million on reserves for customers deemed uncollectible. The company also finished its $300 million share repurchase authorization, buying back 25,460,052 Class A shares for $271.0 million during the nine months, with no repurchases in the third quarter. Rory Read became President and CEO effective November 5, 2024, replacing the co-CEO structure. Management flags churn, macroeconomic uncertainty, long enterprise sales cycles, and the push to become a Rule of 40 company as the main challenges. The company also carries a full valuation allowance against its U.S. deferred tax assets, though management sees a reasonable possibility that sufficient positive evidence may emerge within the next 12 months to release it.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $200.7M | $197.2M | +1.8% | $186.3M | +7.7% |
| Gross profit | $142.9M | $142.9M | -0.0% | $139.9M | +2.1% |
| Gross margin | 71.2% | 72.5% | -1.3 pp | 75.1% | -3.9 pp |
| Research & development | $23.3M | $23.6M | -1.4% | $23.1M | +0.6% |
| Sales & marketing | $77.6M | $80.5M | -3.6% | $75.4M | +2.8% |
| General & administrative | $34.1M | $38.9M | -12.2% | $28.1M | +21.5% |
| Total operating expenses | $135.0M | $143.0M | -5.6% | $126.7M | +6.5% |
| Operating income (loss) | $7.9M | -$87.0K | +9167.8% | $13.2M | -40.2% |
| Operating margin | 3.9% | -0.0% | +4.0 pp | 7.1% | -3.1 pp |
| Net income (loss) | $10.5M | $1.8M | +467.9% | $17.0M | -38.4% |
| Net margin | 5.2% | 0.9% | +4.3 pp | 9.1% | -3.9 pp |
| Diluted EPS | $0.04 | $0.01 | +$0.03 | $0.06 | -$0.02 |
Risks
Net dollar expansion rate decreased to 107.3% for the trailing 12 months ended October 31, 2024 from 117.7% for the prior-year period, driven by elevated churn exacerbated by the current macroeconomic environment. Revenue grew 7.7% in FY2025 Q3 and 10.4% year to date, but macroeconomic pressure on customer spending and renewals could slow future growth.
The business depends on customers renewing subscriptions and expanding usage; customers may not renew on the same or similar terms or may reduce subscription scope. The NDE decline reflects contraction and churn, and any further decline in renewals or expansion would harm revenue and results of operations.
Gross margin decreased to 71.2% in FY2025 Q3 from 75.1% in FY2024 Q3 and to 72.5% year to date from 75.5%, while operating income decreased 40.2% in the quarter and 12.7% year to date. Higher third-party cloud infrastructure, data, and CCaaS delivery costs are pressuring margins.
The X (formerly Twitter) agreement provides data supporting the Unified-CXM platform and expires on December 31, 2026; if it is not renewed on the same or similar terms or is terminated, Sprinklr may not be able to provide the same level of Unified-CXM insights. Reliance on negotiated API and data provider agreements that may be terminated could disrupt platform functionality.
Sprinklr uses AI and Generative AI through third-party partners such as Microsoft Azure and OpenAI, which creates risks of flawed or biased outputs, leakage of sensitive data, intellectual property claims, and evolving regulations like the EU AI Act and FTC algorithmic disgorgement. Failure to deploy AI successfully or comply could harm competitiveness and create legal liability.
On October 31, 2024, the board appointed Rory Read as President and CEO effective November 5, 2024, succeeding Ragy Thomas and Trac Pham. The company faces high competition for technical and sales talent, and recent stock price decreases may reduce the perceived value of equity awards and increase attrition.
Year-to-date general and administrative expense rose 31%, including a $9.0 million increase in provision for credit losses due to increased reserves for certain customers deemed uncollectible. A higher-than-expected provision in Q2 FY2025 caused certain operating results to fall below guidance ranges provided in the previous period.
Guidance is speculative and subject to significant business, economic, and competitive uncertainties; the Q2 FY2025 credit loss provision caused certain operating results to fall below previous guidance. Actual results may differ materially, and failure to meet investor expectations could cause the stock price to decline.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from Sprinklr, Inc.'s SEC filings for Q3 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.